The stock market is set to open tomorrow amid the announcement that President Joe Biden will not seek reelection, which is expected to induce significant volatility.
Nvidia’s stock is currently experiencing one of its most turbulent weeks in recent history, highlighting broader concerns in the market.
The news of Biden’s decision is likely to create an atmosphere of economic uncertainty, prompting Democrats to quickly rally behind a new candidate. Biden has already endorsed Vice President Kamala Harris as a potential nominee.
Josh Thompson, CEO of Impact Health USA, remarked that the market’s reaction to Biden’s withdrawal is likely to be one of turbulence. “Investors generally prefer stability and predictability, and such a significant political shift would disrupt both,” he stated in an interview.
This uncertainty may lead investors to gravitate towards safe-haven assets, such as gold, silver, and the Swiss franc, which tend to be less affected by political and economic fluctuations.
Additionally, there may be a slowdown in what is known as the “Trump Trade.” This term describes market behaviors influenced by investors’ expectations regarding a potential second Trump administration, particularly following Trump’s strong performance in recent debates. During his presidency, Trump favored business interests, benefiting sectors like healthcare, banking, cryptocurrency, oil, and companies including Tesla and the Trump Media and Technology Group.
Analyst Ed Mills from Raymond James noted that while Biden’s exit from the race might cause some reassessment of electoral odds—currently estimated at 60% for Trump and 40% for Biden or another Democrat—he does not foresee a significant widespread reaction in the market.